Article 38, PRC Trademark Law provides:
Any of the following acts shall be an infringement of the exclusive right to use a registered trade- mark:
(1) To use a trademark which is identical or similar to the registered trademark in respect of the same or similar goods without the authorisation of the proprietor of the registered trademark;
(2) To sell goods while knowing that a fake trademark is being passed off as a registered trademark.
(3) To forge or make, without authorisation, representations of the registered trademark of another person, or to sell forged representations or representations made without authorisation of the regis- tered trademark.
(4) To cause, in other respects, prejudice to the exclusive right to use the registered trademark of an- other person.
TRADEMARK LAW OF THE PEOPLE'S REPUBLIC OF CHINA (REVISED) (Zhonghua Renmin Gonghe Guo Shangbiao Fa (Xiuzhen), Di Sanshiba Tiao) (adopted at the 24' Session of the Standing Committee of the 5th National People's Congress on August 23, 1982, revised by the 30 ' Session of the Standing Committee of the 7 National People's Congress on Febru-
ary 22, 1993, and effective July 1, 1993) art. 38 (PRC) [hereinafter "PRC Trademark Law"]. The catch-all provision referring to causing prejudice to the exclusive trademark right of an- other person contained in Article 38(4) above is explained by Article 41 of the Trademark Law Implementing Regulations, which provides:
Any of the following acts will constitute an infringement of the exclusive right to use a registered trademark as referred to in item (4) of Article 38 of the Trademark Law:
(1) dealing in goods which were known or ought to have known to have infringed the exclusive right of another person to use a registered trademark;
(2) using, as a product name or label, written script or a design which is identical or similar to the registered trademark of another person who uses it on the same or similar commodities, with the similarity being sufficient to cause confusion;
(3) intentionally providing storage, transport, postage or harbouring offenders in order to facilitate the infringement of the exclusive right of another person to use a registered trademark.
Doesn't mean shit without enforcement..
The government doesn't know what goods each factory is producing, they still pay taxes on sales, paying employees and overhead. They don't have hidden factories that operate in secret..